Event: according to the company's semi-annual report for 2023, 23H1 achieved an income of 290 million yuan, an increase of 14.1% over the same period last year, and a net profit of 70 million yuan, an increase of 1.3% over the same period last year. In the single quarter, 23Q2 realized revenue of 150 million yuan, an increase of 25.8 percent over the same period last year, and a net profit of 30 million yuan, an increase of 18.7 percent over the same period last year.

The market share continues to increase and the performance maintains positive growth. In the first half of the year, the company achieved revenue of 290 million yuan, an increase of 14.1% over the same period last year, mainly due to the continuous increase in market share in the areas of medical and health care and environmental monitoring. at the same time, the continuous expansion of the output scale of vehicle sensors, high-temperature gas sensors and ultrasonic gas meter machine modules has brought about growth. In terms of subdivision, the income of high-temperature gas sensors mainly based on engine oxygen sensors increased by 4770.9% compared with the same period last year; wisdom metering entered the capacity release period, and the sales revenue of ultrasonic gas meters and their modules increased by 499.2% compared with the same period last year; medical and health sensors based on ultrasonic oxygen sensors benefited from increased health attention, and sales revenue increased by 270.8% compared with the same period last year. Benefiting from the landing of the double carbon and domestic substitution policy for scientific instruments, the sales revenue of the gas analytical instrument business, which is mainly environmental monitoring, increased by 71.9% compared with the same period last year; the sales revenue of the safety monitoring business, mainly industrial safety and refrigerant leakage, increased by 85.2% compared with the same period last year; and due to the influence of inventory water level, the sales revenue of air quality sensors decreased by 25.6%.

Expenses have increased and profits are lower than revenue growth. In terms of expenses, the sales expense rate in the first half of the year was 7.5%, an increase in 1.4pp compared with the same period last year, mainly due to the company's efforts to expand the market and the increase in advertising, travel and exhibition expenses; the management expense rate was 5.4%, an increase in 0.5pp compared with the same period last year, due to the opening and production of the company's Jiashan Park and the increase in labor and depreciation investment In the first half of the year, the R & D expenditure rate reached 10.3%, an increase in 0.7pp compared with the same period last year, as the company increased its investment in new product R & D. in the first half of the year, R & D expenses increased by 22% compared with the same period last year; the financial expense rate was-2.3%, an increase of 1.2pp over the same period last year.

In the first half of the year, the company's gross profit margin was 45.8%, a decrease of 0.4pp compared with the same period last year, and the overall increase in four items of expenses over the same period last year was 3.8pp, resulting in a 25% decrease in net profit margin of 25% year-on-year. The company continues to promote digital transformation and internal risk control capabilities, internal operational efficiency and management efficiency continue to improve, the cost level will continue to be optimized, and profits are expected to be released gradually.

Benefit from the sensor industry domestic substitution, subdivide the automotive field to add a fixed point. The country continues to promote the process of localization of scientific instruments. According to the 14th five-year Plan, China will appropriately layout the country's major scientific and technological infrastructure in advance, and strengthen the R & D and manufacture of high-end scientific research instruments and equipment. The State Council, the central bank and relevant regulatory agencies have all introduced relevant support measures in the aspects of tax reduction, interest discount and loans, and the Ministry of Education and other departments have also listed instruments and equipment as one of the key testing indicators for running vocational colleges. With the promotion of the wave of domestic substitution in the sensor industry, the company is expected to continue to benefit.

In addition, the company has stepped up its expansion efforts in the automotive sensor market. In the first half of 23, the company added about 7 million on-board sensor projects, making breakthroughs in the new project expansion of original customers and the acquisition of new customers and the conversion of orders. The newly launched car seat fan products have entered a small batch pilot stage, and vehicle sensors are expected to contribute new increments for the company.

Profit forecast and investment advice: it is estimated that the EPS in 23-25 will be 2.78,4.30,6.05 yuan respectively, corresponding to 29 times, 19 times and 13 times of PE respectively, maintaining the "hold" rating.

Risk hint: sensor market domestic substitution promotion is not as expected, vehicle market development is not as expected and other risks.